River North project lands Jewel, Bed Bath & Beyond

December 19, 2001|By Thomas A. Corfman, Tribune staff reporter.

At a time when grocery store chains nationwide are cutting back, Jewel-Osco is set to open a small-format, upscale food market and pharmacy in Chicago's River North, catering to the trendy neighborhood's increasing numbers of affluent residents.

In the latest salvo in the ongoing battle for prime grocery-store locations, executives with the Melrose Park-based chain confirmed Tuesday that the company is close to signing a lease for a 32,000-square-foot store in Grand Plaza, a twin-tower, mixed-use development under construction.

Meanwhile, home merchandise retailer Bed Bath & Beyond Inc. has signed a lease for a two-level, 35,000-square-foot store in the development, in the block bounded by Grand Avenue and State, Dearborn and Ohio Streets.

The new Bed Bath & Beyond store will be two blocks from the flagship of its chief rival, Linens 'n Things Inc., at Rush and Ontario Streets, and near several upscale counterparts, including Crate and Barrel at 646 N. Michigan Ave.

The two stores will account for more than half of the 100,000 square feet of above-ground retail space in the Grand Plaza development, which also includes 764 luxury apartments and parking for more than 1,000 cars.

Even in a recession, retailers that expect to survive must continue to expand, although perhaps at a slower pace. And they can be choosier about the sites.

"The leases are a great statement about the project and River North," said Camille Julmy, vice chairman of U.S. Equities Realty LLC, which is co-developer of Grand Plaza with Cataldo/Marovitz LLC, a partnership that includes former state Sen. William Marovitz; Magellan Development Group; and Near North Properties.

The project is set to open in about a year.

To be called Grand Plaza Marketplace by Jewel-Osco, the grocery and pharmacy would benefit from the residential building boom in River North, and would be Jewel's second downtown location.

In August, the company opened a two-level store on Roosevelt Road and Wabash Street on the Near South Side, an area that also has seen rapid growth in new-home construction.

The River North store, less than half the size of the chain's typical new stores, is a refinement of the high-end, high-convenience strategy the company has used for its Roosevelt Road store, which has about 60,000 square feet.

The River North store will put heavy emphasis on delicatessen-style prepared foods and take-out meals, as well as an ample produce section and a meat department more like an old-fashioned butcher shop, with fewer pre-packaged items.

"The customers we are going to serve are upscale businesspeople with very little time on their hands," said Pete Van Helden, president of Jewel-Osco, a division of Idaho-based Albertson's Inc.

The retailing portion of the store will be on street level, with a 9,000-square-foot storage and work area on the lower level.

Retail real estate experts say that Jewel and Dominick's Finer Foods Inc., a division of California-based Safeway Inc., must adapt their formats to accommodate compact downtown locations that are able to serve the growing number of customers in the city's most fashionable areas.

"They could say, `We're only going to do 65,000-square-foot stores,' and they would come up empty-handed," said Michael George, a principal in Mid-America Real Estate Corp. of Oakbrook Terrace.